‘We want our future to be driven out of India’
Alastair Aird, Global Chairman of Wavemaker talks of expectations from India as one of the Top 5 markets of the agency, mandate for Kartik Sharma, marketplace dynamics and meeting challenges ahead
What are the expectations from Wavemaker? What will it do significantly better for clients over what MEC and Maxus perhaps did independently?
The differentiator will be our understanding of the purchase journey, putting the purchase journey at the centre of everything that we do, and our obsession going forward with that purchase journey. It was something that we had, but didn’t optimize and amplify for our clients inside MEC. Everybody is very excited, we can see what the value will be for clients. Another factor will be changing our operating system to rapid growth planning, for the benefit of our clients. So, there is a fundamental change in what our focus will be. From a people focus, the differentiator will be embracing P.A.C.E.D - the pace attributes and values of Maxus, adding ‘D’ for diversity. Those values will be the same everywhere, but how Kartik chooses to bring that to life in India is his call, as he had already brought those values to life at Maxus. We will see a lot of new powerful things for our clients through purchase journey, through our operating system, through the new products that we are developing. We also see a huge opportunity in e-commerce, so you will see us move in that direction.
For our people, we can combine our training programmes, bring the best of our training together, and bring our combined culture to life.
Q] What is the kind of scale that this merger has achieved? What would be the size of the entire business both in India and globally?
The two businesses that we are bringing together will have 8,500 people. It would be 650 people in India. India will become one of the Top 5 markets for us globally. And you can work out what the likely percentage is of India as a contributor to us globally - around 7%-10%. Our global billings according to RECMA is $38 billion for the combined entity. And significantly excess of a billion dollars of net sales and revenue.
Q] Globally, it is understood that several leading Maxus clients are being lined up to move to Essence post the formation of Wavemaker. Could you talk about it? And whether that is the case in India as well?
When we set out in January, what we were trying to achieve was to build three of the Top 5 global businesses, and then also to strengthen Essence. Yes, certain MEC or Maxus clients are moving to Essence around the world, but there are also going to be Mindshare and MediaCom clients. Any movement of clients into Essence has been done via dialogue with those clients first. What you are seeing now is the end point of many months of conversations with clients. One of our priorities is to strengthen Essence and launch Essence in a number of markets. And for the right client, Essence may be the place. Clients that we have moved to Essence from a US perspective are NBCU and Target. Last week, we announced British Telecom (BT) is moving into Essence as well. But Essence is not going to be a network operating in 50 markets, that’s not their ambition. Their ambition is to pick and choose those markets where they think that the business should operate, and India is one of those markets, with an expected January launch.
Q] What is at the centre of your conversation with marketers today?
The reality that CMOs face today is massive complexities of how people consume media and then the disruption that is coming to their business, and how they can use marketing to help address it. What used to be a relatively simple business is becoming incredibly complex as we try and reach the consumer with the right message in the right place at the right time. With time becoming such a precious commodity, clients expect us to work as an integrated team, that we do because we don’t have silos or divisions. What advertisers are expecting is for us to work integrated with all of the different agencies that
It’s a once in a lifetime opportunity to manage a transition from a global perspective. Whether this merger is a success or failure will depend on what the state of our business is in 2-3 years’ time. ALASTAIR AIRD Global Chairman, Wavemaker
they may use. We have the potential to act right, be right at the centre of that integration.
Q] In the entire business of media planning and buying, growth has reduced and remuneration given to agencies has also come down over the years. What can be done about that?
Globally, we have been in a low growth economy and public companies have grown their profit through reduction of cost. But you get to a point where you can’t take anymore cost out of the business. And I think we have reached that point. Procurement in all organizations has squeezed cost out of their business. As we go forward, we have to get back to the growth of businesses, to the growth of brands. And part of that will be reliance on growth of GDP and growth of world economy as well. More money coming back into advertising to grow brands will start in the coming years. You have to invest in your brand to grow. The new remuneration models for media agencies will be tied to much more outcome-based remuneration in future. Everything that we are doing at Wavemaker will be aimed to drive our client’s sales. Our remuneration models will need to be tied to different things, whether that’s cost of acquisition, whether that’s click through rate, whether that’s market share growth, that depends on each individual client. I am happy for our remuneration to be tied to those things that we can influence and can directly have an impact. But, I think there will be a change in the way that remuneration models will move. If our remuneration is tied to the success of our clients, then that incentivizes us to grow our client’s business. If our client’s business grows, then we can make fair and reasonable profit.
Q] Have you set any revenue targets yet?
We are in the process of going through the first round of budgeting as Wavemaker, from a pure business perspective. It’s a little early to say what’s the revenue target-setting. It’s much more qualitative at this stage, about ensuring that we have trained all of our people on rapid growth planning as quickly as possible, about integrating all of our people, more operational factors rather than hard revenue or profit growth target at this stage.
Q] What will be the USP of pitches at Wavemaker? Have you worked on the pitch strategy?
Hopefully, our pitch strategy will be a linked to our purpose. We now exist to build brands that pioneer the future, inspire society, and move customers to action. Our promise in that obviously is to be a key partner, bound together by our purchase journey obsession, that we help clients translate audience insight and behaviours into smart decisions today for a prosperous tomorrow. That is the core of what our proposition will be to our clients.
Q] What will be your top priorities once the launch and transition phase is over?
We then move to focusing on growth of our business, growth of our clients, growth of our people’s careers and not in that order! We will launch our e-commerce practice globally, and keep our content focus. Growing our business with our existing clients is incredibly important - ensuring that what we do in 2018 for them is better than what we did in 2017. The business consequence is that our revenue grows, profit grows, but we have to get the first two things right.
Q] What is the mandate for Kartik Sharma?
What Tim Castree and I expect of Kartik at a global level is to ensure that the product that we develop, the systems that we develop, the people programmes, training programmes that we put in place globally, need to work in India. We also want his input in helping shape what Wavemaker becomes globally as an organization. We want our future to be driven out of India as well. So, we want to steal with pride, product ideas, initiatives that exist in India to become scalable globally. We want to expand with our big clients in India, and work with them to expand globally. So Kartik should help shape our global product, and then India and Kartik drive and scale products out of India to other markets and to us globally.
Q] Where do you see Wavemaker five years from now?
It will depend on things that will have been invented… that we don’t even know about today! Our success will be determined by rapid growth planning, whether the customer journey is at the centre of everything we do, and whether we have moved our business from manually-driven business to a much more technology enhanced efficient business. I want all of our people to spend more of their time understanding the insights and behaviours that are going to shape the consumer’s decision, so that we can help make informed decisions for our clients that will grow and drive their business. We have to be strategic partners to our clients; that’s where the future of our business is going.